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Stress Testing

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Stress Testing Synopsis

Stress testing has become a widely accepted and used tool for financial stability analysis, supervision, and risk management. While the selection of appropriate methods or models (the "hardware") is critical to the usefulness and credibility of stress tests, qualitative aspects-such as the principles, concepts, and frameworks ("the software")-enable their coherent application and ensure consistency as an integral part of overall risk governance.

Stress Testing covers the best practice principles, concepts and frameworks of stress testing that IMF staff have developed over the years. This book is a follow-up to A Guide to IMF Stress Testing: Methods and Models, which focuses on the various methods and models that have been applied in the IMF's macro-financial surveillance of individual financial systems and shared with member countries through technical assistance. These methods and models have been used in the IMF's work through the Financial Stability Assessment Program and Article IV; crisis program assessments; and systemic risk analysis in the Global Financial Stability Report. Although the book was completed prior to the COVID-19 crisis, many aspects of stress testing remain relevant.

Stress testing at the IMF appropriately continues to be a work-in-progress and evolves in response to the latest developments. Ultimately, the ability to adequately evaluate the resilience of a financial system to the adverse impact of crises is the hallmark of a robust stress test, and is integral to the IMF's overall surveillance. Both Stress Testing and A Guide to IMF Stress Testing (2014) are supplemented by online toolkits that can be found on eLibrary.IMF.org.

About This Edition

ISBN: 9781484310717
Publication date:
Author: International Monetary Fund
Publisher: International Monetary Fund
Format: Paperback
Pagination: 277 pages
Genres: Economics

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